5....March 2016 and were processed by HealthSCOPE from 01 January 2016 through 31 March 2016 (PEBP’s Third Quarter Plan Year 2016). These claims were stratified by dollar volume

5. 5. Health Claim Auditors, Inc. quarterly audit of

HealthSCOPE Benefits (HSB) for the timeframe

January 1, 2016 – March 31, 2016.

(For Possible Action)

5.1. Report from Health Claim Auditors.

(Robert Carr III, Health Claim Auditors)

5.2. HealthSCOPE Benefits response to audit

report. (Mary Catherine Person, HSB)

5.3. Accept audit report findings and assess

penalties, if applicable, in accordance with the

performance guarantees included in the

contract pursuant to the recommendation of

Health Claim Auditors.

5.1. 5. Health Claim Auditors, Inc. quarterly audit of


January 1, 2016 – March 31, 2016.


5.1. Report from Health Claim Auditors.

(Robert Carr III, Health Claim Auditors)

Claims and System

Audit Report for

Audit Period: PEBP Plan Year 2016, Quarter Three

January, February and March 2016

Audited Vendor:

Submitted By:

Health Claim Auditors, Inc.

May 2016

http://www.healthscopebenefits.com/index.php

TABLE OF CONTENTS

Executive Summary 1 - 3

Procedures/Capabilities/Supporting Data 4 - 25 Introduction 4

Breakout of Claims 4

Payment/Financial Accuracy 5 - 6

History of Performance Guarantee Performance 6

Claim Payment Turnaround 6

Customer Service 7

Soft Denial Claims 9

Overpayments 10

Subrogation 12

Large Utilization 13

Dedicated Team Members 13

HSB System 13

HSB Policy/Procedure 14

Eligibility 14

Deductibles, Benefit Maximums 15

Unbundling/Rebundling 15

Concurrent Care 16

Code Creeping 16

Procedure, Diagnosis, Place of Service 16

Experimental/Cosmetic Procedures 16

Medical Necessity Guidelines 17

Patterns of Care 18

Mandatory Outpatient/Inpatient Procedures 18

Duplicate Claim Edits 18

Adjusted Claims 18

Hospital Discounts 18

Hospital Bills and Audits 19

Filing Limitation 19

Unprocessed Claim Procedures 19

R&C/Maximum Allowance 20

Membership Procedures 21

COBRA 21

Provider Credentialing 21

Coordination of Benefits 22

Medicare 22

Controlling Possible Fraud/Security Access 22

Quality Control/Internal Audit 23

Internet Capabilities 24

Communication, U/R and Claims Depts. 24

Claim Repricing 24

Banking and Cash Flow 25

Reporting Capabilities 25

General System 25

General Security 25 HCA Claim Audit Procedures 26

Specific Claim Audit Results 27 - 32

HCA 05/16 Page 1 St.NV.PEBP/HSB 3rd Qtr PY 16

EXECUTIVE SUMMARY

Audited Random Selection Data

Total number of claims: 500

Total Charge Value of random selection: $ 789,719.59

Total Paid Value of random selection: $ 249,299.85

Performance Guaranteed Metric Results

Metric Guarantee Measurement Actual Pass/Fail

Payment

Accuracy

> 97% of claims audited are to be paid

accurately

98.80%

Pass

Financial

Accuracy

> 99% of the dollars paid for the audited

claims is to be paid accurately

98.53%

Fail Claim Processing

Turnaround Time - 90% of all claims processed within 18 days. 99.74% Pass

- 98% of all claims processed within 30 days. 99.98% Pass

Customer

Service

-Telephone Response Time: < 30 seconds. 29 sec. Pass

-Telephone Abandonment Rate: < 2%. 1.96% Pass

-Member Problems documented w/in 2 days 99.23% Pass

-Member Problem resolved within 10 days 97.25% Pass

This audit detected twelve (12) identified types of errors (related to HSB operations

without network caused errors), a decrease of one (1) from the previous audit.

Issues identified within this audit/HCA recommendations (beyond common error

issues)

Unpaid Services of Network Providers

At the time of this audit it remained a concern that claims billed from specific hospital

providers containing contract language for Revenue 390 (Blood Products) are not

being repriced by Hometown Health (HTH) and caused to be paid by HealthSCOPE

because invoices identifying the costs (as described within contract) are not received

from the providers. In late 2014, HTH stated that they formally informed the provider

of required data for correct adjudications, however, it was recommended that this

issue be addressed again by HTH for resolution or deleted from their contract with

this provider to prevent a more serious issue in the future. HTH informed HCA in

April 2016 that these contracts have been reopened for the purpose of a resolution to

this issue. HCA will report the outcome upon receipt from HTH.


Previous Recommendation(s)

HCA is pleased to report that all recommendations accepted by the PEBP Board of

Directors has been implemented and/or in the process of application at the time of this

audit.

Primary Reasons for Financial Accuracy Underperformance

The HSB adjudication system is functioning at a high efficiency level, however, the

errors detected within the valid random selection which contributed to the majority of

the incorrect dollars paid within the Financial Accuracy metrics were within two (2)

manual application issues:

1) The incorrect application of Multiple Surgical Guideline reductions as they pertain

to American Medical Association (AMA) and Medicare rules;

2) The application of allowable rate reduction(s) for anesthesia services when both a

Nurse Anesthetist (CRNA) and an Anesthesiologist bill for the same session.

Recognition of Positive Action(s) by HSB

It is very typical throughout the United States in every audit to identify large dollar

claims that are considered Non PPO and/or those that have no Usual and Customary

Rates (UCR) or Reasonable and Customary (R&C) rates associated with the

service(s). This and previous audits have acknowledged numerous examples of HSB

conducting and seeking alternative methods to reduce egregious billings within this

issue. An example of these processes were found within this audit which included the

excessive billings of Air Flight service providers. Two (2) of these type claims were

billed to PEBP in excess of $577,000.00, of which a reasonable allowable was

approximately $32,000.00. HCA reviewed the methodology utilized for these

monetary reduction(s) and find that HSB should be congratulated on seeking the

appropriate resource expertise and applying reasonable adjudicating practices for

these claims beyond the efforts observed in most audits.

Trends/Issues

The audit revealed the following issues or trends detected from the random selection and

bias selected claims. Please note: the reference numbers in bold type are claims from the

random selection and are included within the statistical calculations. Reference numbers

in normal type were identified as issues in bias claims as defined earlier and are not

included within the statistical calculations of this audit. Specific information regarding

supporting reference numbers can be found in the Audit Results Section in numerical

sequence, which begins on page 27. Incorrect rate applied; Supporting reference no. 334

Paid medical service under routine benefits; Supporting reference nos. 288 and 449

Procedure modifier (CRNA & Anesthesiologist) not applied; Supporting reference no. 087 and 334B


Services incorrectly bundled; Supporting reference no. 122

PPO Exception Rule not applied; Supporting reference no. 127

Claim denied in error; Supporting reference no. 167

Incorrect network utilized; Supporting reference no. 225

Claim not coordinated with Medicare; Supporting reference no. 261

Facility bill paid at incorrect coinsurance; Supporting reference no. 336

Paid under medical versus routine; Supporting reference no. 346

Bilateral surgical reduction not applied; Supporting reference no. 407

Dental UCR not applied; Supporting reference no. 448

The audit revealed the following issues, which appear to be administered properly

by HSB, but should be brought to client attention for proper notification or verification.

Specific information regarding supporting reference numbers can be found in the Audit

Results Section in numerical sequence, which begins on page 27.

SHO updated fee schedule received 1/21/16; Supporting reference nos. 111, 116, 145, 213, 499 and 500

Mammogram with medical diagnosis paid at 100% as first plan

year benefit; Supporting reference no. 288

Medicaid reclamation claim for PPO provider processed and paid

as out-of-network; Supporting reference no. 358

Possible system display error; Supporting reference no. 514

Application of Multiple Surgical Guidelines (bilateral reductions) to primary

service codes with percentage off contract rates;

Supporting reference no. 004


CLAIM PROCEDURES/

SYSTEM CAPABILITIES/SUPPORTING DATA

Introduction

In April 2016, Health Claim Auditors, Inc. (HCA) performed a Claims and System Audit

of HealthSCOPE Benefits (HealthSCOPE) located in Little Rock, Arkansas on behalf of

The State of Nevada Public Employees’ Benefits Program (PEBP).

This audit was performed by collecting information to assure that HealthSCOPE is doing

an effective job of controlling claim costs while paying claims accurately within a

reasonable period of time.

This report was presented to HealthSCOPE for any additional comments and responses

on 25 April 2016.

Breakdown of Claims Audited

The individual claims audited were randomly selected from PEBP’s claims listings as

supplied by HealthSCOPE. These claims had dates of service ranging from April 2015 to

March 2016 and were processed by HealthSCOPE from 01 January 2016 through 31

March 2016 (PEBP’s Third Quarter Plan Year 2016). These claims were stratified by

dollar volume to assure that HCA audited all types of claims. The audit also includes

large dollar paid amounts that are considered as bias* selected claims.

*Bias claims are not part of the random selection but were audited by HCA because of

some “out of the ordinary” characteristic of the claim. There are multiple criteria to

identify the “out of the ordinary” characteristics. Examples are duplicates, CPT up

coding, exceeding benefit limits, etc.

The breakdown of the 500 random selected claims audited is as follows:

Type of Service Charge Amount Paid Amount Paid Distribution No. of Claims

Medical $ 247,840.20 $ 71,334.42 28.6% 282

Outpt. Hospital $ 353,661.23 $ 103,595.72 41.5% 39

Inpt. Hospital $ 109,899.66 $ 39,089.95 15.7% 3

Dental $ 78,318.50 $ 35,279.76 14.2% 176

TOTAL $ 789,719.59 $ 249,299.85 100% 500


Payment Accuracy

Per PEBP, the Service Performance Standards and Financial Guarantees Agreement for

the payment accuracy is to be 97% or above of claims adjudicated are to be paid correctly

or a penalty of 2.5% of Quarterly Administration Fees for each percent (%) point, or

fraction thereof, below performance guarantee is to be applied. Payment Accuracy is

calculated by dividing the total number of claims not containing payment errors in the

audit period by the number of claims audited within the random selection.

The Payment Accuracy Percentage of the number of claims paid correctly from the

HealthSCOPE random selection for this audited quarter is 98.8%.

Number of claims: 500

Number of claims paid incorrectly: 6

Percentage of claims paid incorrectly: 1.20%

Number of claims paid correctly: 494

Percentage of claims paid correctly: 98.80%

Payment Accuracy for the past four quarters

Financial Accuracy

Per PEBP, the Service Performance Standards and Financial Guarantees Agreement for

the financial accuracy of the total dollars paid for claims adjudicated is to be paid

correctly at 99% or above or a penalty of 2.5% of Quarterly Administration Fees for each

percent (%) point, or fraction thereof, below performance guarantee is to be applied.

Financial Accuracy is calculated by dividing the total audited dollars paid correctly by

the total audited dollars processed within the random selection.

The Financial Accuracy Percentage of paid dollars remitted correctly on the

HealthSCOPE claims selected randomly for this audited quarter is 98.53%.

This audit reflected forty-six and four tenths percent (46.4%) of the audited errors within

the valid random selection were overpayments.

Paid dollars audited $ 249,299.85

Amount of paid dollars remitted incorrectly $ 3,656.52

Percentage of Dollars paid incorrectly 1.47%

Paid Dollars of claims paid correctly $ 245,643.33

Percentage of Dollars Paid correctly 98.53%


Financial Accuracy for the past four quarters

Historical Statistical Data of Performance Guarantees

The following reflects the historical statistical data since the origin of PEBP medical

claims administration by HealthSCOPE. The entries designated in bold red type are

measurable categories below the Service Performance Guarantees Agreement.

Period Audited Payment

Accuracy

Financial

Accuracy

Turnaround

Time

Telephone

Response

Telephone

Abandon Rate

1st Qtr PY 2012 95.7% 98.6% 7.6 days :17 1.43%

2nd Qtr PY 2012 93.3% 97.3% 12.7 days :12 1.16%

3rd Qtr PY 2012 96.8% 98.6% 3.7 days :18 1.32%

4th Qtr PY 2012 95.8% 99.5% 11.4 days :14 0.93%

1st Qtr PY 2013 97.2% 99.4% 10.4 days :20 1.06%

2nd Qtr PY 2013 98.5% 99.3% 7.3 days :11 0.87%

3rd Qtr PY 2013 98.0% 95.7% 6.4 days :25 1.98%

4th Qtr PY 2013 98.4% 99.7% 6.2 days :29 1.61%

1st Qtr PY 2014 98.8% 99.6% 5.4 days :14 0.84%

2nd Qtr PY 2014 99.2% 99.2% 5.9 days :29 1.96%

3rd Qtr PY 2014 98.0% 98.5% 5.2 days :30.5 1.92%

4th Qtr PY 2014 99.0% 99.8% 4.4 days :28 1.96%

1st Qtr PY 2015 98.8% 99.27% 4.9 days :29.4 1.94%

2nd Qtr PY 2015 99.0% 99.35% 8.1 days :22 1.18% 3rd Qtr PY 2015 98.6% 99.8% 5.9 days :29.7 1.97%

4th Qtr PY 2015 99.6% 95.6% 4.9 days :29.4 1.91%

1st Qtr PY 2016 99.0% 98.9% 4.8 days :29.1 1.94%

2nd Qtr PY 2016 98.6% 99.7% 3.5 days :24.0 1.14%

3rd Qtr PY 2016 98.8% 98.53% 5.3 days :29.0 1.96%


Turnaround Time

Per the Service Performance Standards and Financial Guarantees Agreement, the

turnaround time for payments of claims is measured in calendar days from the date

HealthSCOPE receives the claim until the date of process. Ninety percent (90%) of all

claims are to be processed within eighteen (18) calendar days and ninety nine percent

(99%) are to be processed within thirty (30) calendar days or a penalty of two percent

(2.0%) of Quarterly Administration fees for each percentage point or fraction thereof in

non-compliance per level is to be applied. HCA had requested the report that reflects the

measurement of this issue. This report reflected that 99.74% of “clean” claims were

processed within 18 calendar days and 99.98% of “clean” claims were processed within

30 calendar days, in compliance with the performance guarantee. This report also

displayed the total turnaround process time for all claims at 3.7 business days.

Turnaround Time Measurements

The turnaround time, measured only from the random selected claims, for Medical claims

was 7.3 calendar days, Out Patient Hospital claims was 8.7 calendar days, In Patient

Hospital claims was 7.3 calendar days and Dental claims was 1.3 calendar days.

During the audit period of 01 January 2016 to 31 March 2016, HealthSCOPE had

received 810 PEBP e-mail inquiries for information via the internet. The average

turnaround time for these inquiries was less than 24 hours (24:00) with the exclusion of

those received on a holiday and/or weekend day.

Customer Service Satisfaction


telephone response time reflects all calls must be answered within thirty (30) seconds or a

penalty of one percent (1%) of Quarterly Administration fees for each second or fraction

thereof in non-compliance is to be applied. HCA has reviewed the appropriate report for

the PEBP third fiscal quarter Plan Year 2016, which revealed the average incoming

answer speed to be 29.0 seconds (0:29.0). The telephone response time was 30 seconds

for January 2016, 29 seconds for February 2016 and 28 seconds for March 2016.

Telephone Response Time (average)



abandonment rate must be under two percent (2%) of total calls or a penalty of one

percent (1%) of Quarterly Administration fees for each percentage point or fraction

thereof in non-compliance is to be applied. Please note: this performance measurement

was changed from 3% as the measured benchmark for previous plan years. HCA has

reviewed the appropriate report for the PEBP third fiscal quarter Plan Year 2016, which

revealed the abandoned calls ratio to be 1.96%. The telephone abandonment rate was

2.43% for January 2016, 1.94% for February 2016 and 1.53% for March 2016.

Telephone Abandonment Rate

Per the Service Performance Standards and Financial Guarantees Agreement, ninety five

percent (95%) of incoming PEBP member problems must be documented within two (2)

business days and resolved within ten (10) business days or a penalty of one percent (1%)

of Quarterly Administration fees for each percentage point or fraction thereof in non-

compliance is to be applied. HCA has reviewed the appropriate report for the PEBP third

fiscal quarter Plan Year 2016, which revealed that HealthSCOPE documented 99.23% of

problems within two business days and resolved 97.25% of problems within ten business

days.

HealthSCOPE has eighty plus (80+) Customer Service Reps (CSRs), of which, the

majority are in the Little Rock office with an average of eight (8) years experience.

Health SCOPE currently has eighteen (18) CSRs dedicated to the PEBP plan.

HealthSCOPE stated that customer service hours of operation will be applied to PEBP

direction for proper service levels.

Benefit data is supplied by electronic documentation so that the analyst may explain

benefit information to clients, members and providers by HealthSCOPE.

HealthSCOPE stated that the customer service representatives will not have the ability to

make system changes.

HealthSCOPE’s telephone conversations are documented for future reference.

HealthSCOPE does have an audit process for Customer Service Representatives.

HealthSCOPE is able to monitor trends/errors found through Customer Service.

HealthSCOPE can conduct customer service satisfaction surveys to determine employee

satisfaction of claims administration and service upon client request.


Soft Denied Claims

The audit identifies the volume of claims adjudicated and placed in a “soft denied” status.

HCA recognizes and respects the need to place certain claims in a soft denied status such

as claims that require additional information or special calculation of payment. It is

HCA’s opinion that these amounts are the result of HealthSCOPE conducting due

diligence and resolution of the issues and trends including those previously detected in

previous audits. It is important to include this data within this report to disclose the

outstanding unpaid claims that could create an artificial debit/savings during the time that

these claims were adjudicated. Note: The measurement of this data was provided as a

“snapshot” report. The report reflected the “soft edit” amounts as they were reported on

the specific day that the report was recorded.

The report for the current claims placed in a “soft denied” status reflect a total of 2,871

claims representing $ 10,360,017.78

Soft Denied claims history:

Audit Period Total Number of Claims Charge Amount Value of Soft Edits

1st Qtr PY 2012 2,607 $ 7,544,177.55

2nd Qtr PY 2012 4,068 $10,697,954.53

3rd Qtr PY 2012 1,536 $ 6,472,249.56

4th Qtr PY 2012 559 $ 2,205,318.16

1st Qtr PY 2013 1,053 $ 3,413,738.12

2nd Qtr PY 2013 1,107 $ 5,019,961.70

3rd Qtr PY 2013 1,023 $ 4,179,542.34

4th Qtr PY 2013 1,094 $ 3,049,481.74

1st Qtr PY 2014 1,389 $ 3,853,629.07

2nd Qtr PY 2014 1,157 $ 2,510,539.33 3rd Qtr PY 2014 1,621 $ 7,873,432.21 4th Qtr PY 2014 1.487 $ 4,665,197.77 1st Qtr PY 2015 1,404 $ 5,901,903.17 2nd Qtr PY 2015 1,668 $ 6,930,288.41 3rd Qtr PY 2015 2,897 $10,800,874.08 4th Qtr PY 2015 2,498 $10,685,255.24 1st Qtr PY 2016 3,071 $13,027,717.82 2nd Qtr PY 2016 2,543 $13,547,682.34 3rd Qtr PY 2016 2,871 $10,360,017.78


Overpayments

The previous PEBP health plan administrator (UMR) provided HealthSCOPE with

a report displaying the outstanding identified overpayments reflecting a grand total

of outstanding overpayments at $1,751,949.42. HealthSCOPE conducted much research

on these overpayments and found that 507 of these claims were deemed as no longer

valid due to providers showing items that were already paid to UMR, corrected claims

were sent to resolve the issue, etc. As of this audit, these aged overpayments

(overpayments aged in excess of four years) remain “on the books” as active, however,

are not displayed and reported as current overpayments.

HCA requested an overpayment report that reflects the identified current outstanding

overpayments incurred since the beginning of the contract period with HealthSCOPE.

This report reflected a current total of 3,360 (an increase of 207 from the previous report)

overpayments with a potential recovery value of $1,475,131.43 (a decrease of

$330,181.88) for HealthSCOPE. Detailed information regarding outstanding

overpayments can be reviewed in a separate Supplemental Report, which for

confidentiality purposes is not included in this report. It is made available to PEBP staff

should they request it.

During the audited period, HealthSCOPE recovered a total amount of overpayments for

an amount of $238,970.44 minus fees applied.

If an overpayment is detected by Health SCOPE, an overpayment refund request is

sent by the Overpayment Department. Follow-up on all overpayments is

conducted every thirty (30) days for three (3) letters.

If collection is not made after the 3 letters, collection rights are sent to their vendor with a

contingency fee as declared within their RFP 1983 response.

HealthSCOPE maintains an overpayment log and can supply this in report form.


Of the 3,455 identified current outstanding overpayments (HSB only), 55.4% were

found to be caused by external sources that are not associated with the

HealthSCOPE adjudication processes. Breakout of the HealthSCOPE’s current

overpayments are listed by reason as follows:

% of all Error Type

18.39% Incorrect Benefit Applied

15.95% Corrected SHO Network Pricing/Feed

12.02% No COB on file

10.33% Incorrect Rate Applied

10.19% Provider caused, rebilled, charges billed in error, corrected EOB

8.47% Corrected Network pricing

5.47% Duplicate

4.39% Corrected HTH Network Pricing

3.17% COB incorrectly calculated or not applied

1.95% Processed under the incorrect provider

1.05% Industrial and/or possible Workers Compensation claim

0.99% Processed under incorrect patient

0.93% Paid after termination

0.79% Incorrect assignment applied

0.79% Exception/Appeal

0.76% Adjusted after medical review

0.64% Multiple Surgical Guidelines not applied

0.64% Services not covered under plan

0.55% Pharmacy claim deductible/Co-Insurance error

0.55% Exceeded maximum benefit limits

0.49% Paid PPO as NON PPO provider

0.47% Paid NON PPO provider as PPO

0.26% First Health Pricing Adjustment

0.20% Timely Filing

0.15% Incorrect units calculated error

0.12% Rental payments exceeded DME purchase price

0.09% Benefit Clarification

0.09% Subrogation error

0.06% Eligibility

0.03% Incorrect Pre-Certification applied

0.03% Paid Asst. Surgeon as Surgeon


Subrogation

HCA requested a subrogation report that can be reviewed in a separate Supplemental

Report, which for confidentiality purposes is not included in this report. It is made

available to PEBP staff should they request it.

This report reflects open subrogation claims representing a current potential recovery

amount of $2,273,415.66; a decrease of $285,248.77 from the previous quarter.

Reports received from HealthSCOPE reflect that subrogation recoveries for the audited

period was $183,280.16. After contingency fees were paid, PEBP received $155,788.14.

HealthSCOPE system will apply a pursue and pay subrogation policy as directed by

PEBP. Per HealthSCOPE, subrogation is determined and pursued on all claims where the

total amount paid equals to or exceeds $1000 (one thousand).

HealthSCOPE stated that the claims system is automated to identify claims indicating a

diagnosis code (ICD-9) that could be related to subrogation situation.

HealthSCOPE does identify possible subrogation cases internally. HealthSCOPE utilizes

a third party vendor for recovery of monies. Vendors are paid a contingency of which the

administrator receives a portion of and disclosed within RFP 1983 for Third Party Claims

Administration.

HealthSCOPE does not conduct auditing of outstanding subrogation cases sent to

their vendors, but sends any cases not picked up by the main vendor to another

vendor for review.

HealthSCOPE depends on the external vendors to conduct the appropriate International

Classification of Diseases (ICD) sweep checks for subrogation detections. HealthSCOPE

is currently utilizing the new ICD-10 conversions and the coding has been completed

within their system.

Per HealthSCOPE, claims related to Worker’s Compensation are denied.

Recoupment and payments for subrogation claims are assigned as directed by PEBP.


High Dollar Claimants

Per the request of PEBP staff, HCA has requested a report to identify the number

of active, retiree or COBRA elected participants or dependents who have

obtained a plan paid level of $750,000.00 or greater.

This report reflected forty-eight (48) members and sixteen (16) dependents for a total

of 64 active participants, who have obtained this level of plan payment participation

representing an accrued dollar paid amount of $88,766,125.04.

Personnel

The audit included a review of the HealthSCOPE personnel dedicated or assigned to

PEBP. The current Organization Chart for individuals assigned to the PEBP plan, is as

follows:

- Claims Administration Vice President;

- Account Managers, CHANGED, one added and one deleted for a total of 2;

- Operations Support Director;

- Provider Maintenance Specialist;

- Financial Analysts;

- Claims Administration Director;

- Claims Administration Manager;

- Claims Administration Supervisors; 2 individuals;

- Claims Analysts, CHANGED, two individuals deleted for a total of 12 individuals;

- Eligibility Director;

- Eligibility Manager;

- Eligibility Team Lead;

- Eligibility Specialist, 2 individuals; CHANGED, one individual deleted for a total of

1 individual;

- Customer Service Vice President (Ohio);

- Customer Service Director;

- Customer Service Representatives, CHANGED, four individuals added and four

deleted for a total of 18 individuals;

- Correspondence Supervisor;

- Correspondence Specialist, one (1); CHANGED, deleted from Organizational Chart

- Scanning Specialist; CHANGED, deleted from Organizational Chart

- Recoveries Supervisor;

- Recoveries Specialists, 2 individuals;

- Senior Data Analyst.

HealthSCOPE System Overview

The detailed reporting following this executive summary reflects the HealthSCOPE

system capabilities. The following issues have been identified as possible system

improvements. Note: Certain issues presented within the policy/procedures section may

be improved and/or corrected by possible system edit additions.


The HealthSCOPE system does not electronically apply the reductions for situations

where multiple surgical (service modifier -51-) and bilateral (service modifier -50-)

services are provided. HCA recognizes and acknowledges that HealthSCOPE, through

intense internal training, has made significant improvements in processing claims with

multiple surgical (service modifier -51-) and bilateral (service modifier -50-) services.

The HealthSCOPE system is not automated to determine if anesthesia is billed by both

the hospital and anesthesiologist under both a revenue code and separate CPT service

code.

HealthSCOPE Policy/Procedures

The detailed reporting following this executive summary reflects the HealthSCOPE

policies and procedures. It was found during the administrator test audit and the current

claims and system audit that HealthSCOPE has developed and executes policies and

procedures as accepted within industry standards and qualification(s).

Eligibility

The HealthSCOPE system systematically denies claims for services rendered prior to or

after the effective date.

The HealthSCOPE system systematically adjudicates claims pertinent to the date of

service for those claims received prior to or after any benefit changes.

The HealthSCOPE system has the capability to load by line of coverage tiers (i.e.: single

medical/family dental, etc.).

HealthSCOPE can, if requested, request divorce decrees or court orders for those

dependents of divorced or separated parents.

The HealthSCOPE system will enforce IRS regulations if the Plan Document does not

require stricter requirements.

Disabled (handicapped) dependent status is determined by PEBP when a covered

dependent child has reached the age of 26, which would terminate his/her status as a

dependent. HealthSCOPE can determine disabled dependent status with internal medical

personnel if required.

HealthSCOPE has stated that they would not ever add a member dependent without

PEBP authorization.

HealthSCOPE stated that the turnaround time to add or delete a member’s eligibility is

within 24 hours of receipt.

If a member is terminated retroactively, HealthSCOPE will review that member’s claim

history to determine any overpayments for possible recoveries and proceed per PEBP

instructions.


Deductibles, Out-of-Pocket and Benefit Maximums

The HealthSCOPE system is capable of separate PPO and Non PPO accumulators.

All deductibles, out-of-pocket expenses and most benefit maximums are tracked by the

HealthSCOPE system.

The HealthSCOPE system contains automated carry over deductible features if

necessary.

HealthSCOPE system contains integrated deductibles for dental and medical claims.

HealthSCOPE does have experience of applying the Prescription Drug and Medical

claims deductibles as reflected within the PEBP SPD.

Unbundling/Rebundling

The HealthSCOPE system can systematically edit to identify laboratory, diagnostic and

radiology charges that have been unbundled and billed separately.

The HealthSCOPE system has the electronic capacity to match multiple claims in history

for application of the unbundling edit.

The HealthSCOPE system systematically soft edits for multiple surgical guidelines, for

those situations where a surgeon is billing for more than one (1) surgical procedure

during the same operative session. The HealthSCOPE system has the capacity to match

claims in history for application of the multiple procedure reduction edit.

For Network providers and Non-PPO providers where multiple surgical procedures have

been performed, the HealthSCOPE system will electronically adjudicate and apply 100%

of the Reasonable and Customary (R&C) or the provider specific fee schedule amount for

the major procedure, 50% of the R&C or network fee schedule amount for subsequent

procedures or any deviation designed by the network contract. This application is

conducted manually with HealthSCOPE. The system can calculate the claim by global or

individual allowance accounting.

For Network providers and Non-PPO providers where bilateral surgical procedures have

been performed, the HealthSCOPE system will not electronically adjudicate to allow

100% of the Reasonable and Customary (R&C) or the provider specific fee schedule

amount for the major procedure and 50% of the R&C or network fee schedule amount for

the secondary procedure. This application is manually applied.

HealthSCOPE manually breaks this issue into separate line services for adjudication.

The HealthSCOPE system is automated to identify pre/post operative care related to

surgical procedures.

The HealthSCOPE system denies incidental procedures when in relation to primary

procedures.


The HealthSCOPE system systematically identifies claims that contain a same day

procedure (procedures that are not customarily billed on the same day as a surgical

procedure) unless billed under the same provider.

HealthSCOPE will allow the doctor to bill the initial obstetrical diagnostic office visit.

The subsequent visits are paid and then manually tracked and applied to the global

obstetrical fee. Reasonable and Customary (R&C) allowance or network fee schedule

amount is applied to the global obstetrical fee. Obstetrical lab and diagnostic procedures

are allowed to be billed separately.

Concurrent Care

The HealthSCOPE system is not automated to identify situations where more than one

(1) physician is billing for services during the same time period for the same diagnosis.

The claims analysts rely on the system’s possible duplicate edit to detect this situation.

Code Creeping

The HealthSCOPE system is automated to identify code creeping. An example of this

occurs when a physician is consistently billing for an initial or new patient office/hospital

visit when services performed are actually rendered for a subsequent or established

patient visit.

Procedure, Diagnosis and Place of Service

The HealthSCOPE system is automated to determine the correct usage of the Current

Procedural Terminology (CPT) code. The system is automated to edit if the patient’s age

or gender does not concur with the (CPT) code.

The HealthSCOPE system edits if multiple CPT codes that are billed on the same claim

don’t belong together.

The HealthSCOPE system is automated to identify if the place of service does not concur

with the (CPT) code.

The HealthSCOPE system is also automated to edit if a diagnosis does not concur with

the (CPT) code.

The HealthSCOPE system has the capability to edit for routine/medical diagnosis’ to

determine which benefits are allowable under routine versus medical.

Experimental and Cosmetic Procedures

The HealthSCOPE system is automated to assist processors in identifying those

procedures that are or could be cosmetic. Analysts are also trained to identify these

claims. These procedures can also be identified during the pre-certification process.

The HealthSCOPE system can be programmed to systematic hold or deny these types of

claims, depending upon plan election.


Medical Necessity/Potential Abuse Guidelines and Procedures

The HealthSCOPE system is automated to determine the appropriateness of an assistant

surgeon based on the surgery performed. These claims can be pended or denied,

depending upon the plan election.

The HealthSCOPE system is automated to determine the appropriateness of an

anesthesiologist based on the service performed. These claims can be held or denied,

depending upon the plan election.

The HealthSCOPE system is not automated to determine if anesthesia is billed by both

the hospital and anesthesiologist under both a revenue code and separate CPT service

code.

HealthSCOPE determines medical necessity for the rental or purchase of durable medical

equipment (DME) by prescription from a physician or internal Medical Reviewers.

Rental cost of DME is not systematically tracked up to the purchase price by

HealthSCOPE to assure that PEBP will pay no more for rental than it would if this

equipment had been purchased. HealthSCOPE tracks this issue on a manual basis within

their system.

HealthSCOPE investigates to determine if a prescription is a federal legend drug. They

utilize the Medi-Span database for this procedure.

Claims involving chiropractic care, physical therapy are determined for medical necessity

by HealthSCOPE. Therapeutic treatment needs to be rendered by a licensed physical

therapist. Treatment must be commonly and customarily recognized as appropriate within

the doctor’s profession.

Per HealthSCOPE, medical necessity for infusion services are usually determined by

Utilization Review but can be determined internally if necessary.

The HealthSCOPE system can comply with authorization, repricing and all requirements

as they pertain to adjudication of Mental Health claims.

HealthSCOPE does execute on a regular basis, daily exception reports, which are run for

supervisors to review edits that are overridden.

The HealthSCOPE system has the capability to identify repeat tests being done by both

primary physicians and specialists.


Patterns of Care and Treatment for Physicians

HealthSCOPE has the capability to conduct evaluations of patterns of care of physicians

on patient outcome studies (success) for various procedures and communicate facts to

physicians to eliminate unnecessary or ineffective care or disclose potential fraud or

trends of fraud.

Mandatory Outpatient/Inpatient Procedures

The HealthSCOPE system is not automated to determine those procedures that do not

require hospitalization. Pre-certification is required for an inpatient stay and many

surgical procedures, of which, most procedures will be identified at that time.

Duplicate Claim Edits

The HealthSCOPE system is automated to identify duplicate claims. The HealthSCOPE

system will “soft” edit a claim under partial match and a “hard” edit under exact match

circumstances. The following criteria are matches: Date of Service, CPT including

modifier and Provider tax identification number.

In the event of multiple provider submissions, the PEBP member will receive an

Explanation of Benefits (EOB) for all claims paid.

Adjusted Claims

In the event that a claim was previously paid and an adjustment is made to the original

adjudication, the HealthSCOPE system will assign a “claim identification number” to the

adjustment that reflects the original paid claim. HealthSCOPE links the original with the

adjusted claim(s) with a notation on subsequent claim screens.

Hospital and Other Discounts

HealthSCOPE can automate all PPO Provider discounts including per diem and

Diagnosis Related Group (DRG) arrangements.

HealthSCOPE stated that PPO (Preferred Provider Organization) provider rates which

can be obtained can be repriced in-house.

If a network has negotiated a prompt payment discount, the HealthSCOPE system is

programmed to apply the discount.


Attempts to negotiate non-PPO provider discounts are conducted by HealthSCOPE’s

vendors, with contingencies as reported within the response to RFP 1893. PEBP can set

this issue at as low as $0 for HealthSCOPE.

HealthSCOPE declared that they do not collect any year end settlements, rebates, etc.

other than those declared within their response(s) to RFP 1893.

HealthSCOPE stated that they would review and disclose any provider discount contracts

relative to PEBP claims for the absence of any “Hold Harmless” language as an aid in

protecting PEBP members.

Hospital Bills (UB-92) and Audits

HealthSCOPE requires itemized hospital bills to determine non-covered items.

Itemization for all hospital bills over $10,000.00 is required by HealthSCOPE to

determine non-covered items.

The HealthSCOPE system utilizes revenue codes when processing hospital bills.

HealthSCOPE has an internal hospital audit program in place. All non-PPO claims over

$50,000.00 are sent for audit. HealthSCOPE also stated that some claims are audited

through their external audit process. HealthSCOPE is willing to accept any amount PEBP

determines as a minimum for this issue. Contingency fees and administrator percentage

shares are disclosed within their responses to RFP 1983.

Filing Limitations

The HealthSCOPE system can systematically apply the appropriate standard filing

limitation for submitting all claims. The standard filing limitation for submitting claims

for PEBP is twelve (12) months after date of service.

Unprocessed Claims Procedures

Unprocessed claims are logged on the HealthSCOPE system for verification of receipt.

HealthSCOPE has paper claims scanned and entered into their adjudication system within

twenty four (24) hours of receipt.

HealthSCOPE stated that this process and data entry will be conducted by individuals

within the continental United States. HealthSCOPE stated that they do utilize a company

that conducts this process outside the United Sates, however, has ensured that PEBP data

stays on shore.


Reasonable/Customary and Maximum Allowances

HealthSCOPE is utilizing R&C allowances for non-network providers. HealthSCOPE is

utilizing R&C data for medical claims at the seventieth (70th) percentile. Out of Network

dental providers are paid using the same allowables as in-network dental providers,

subject to the appropriate geographic location rates.

R&C is applied utilizing the date of service and geographical location (zip code). R&C

data is updated four times per year by HealthSCOPE, last updated in April 2016.

HealthSCOPE does not have separate R&C schedules for Facilities versus Professional

services, however, HealthSCOPE uses a vendor that can apply reductions for Non PPO

facilities.

HealthSCOPE will pay medical claims at the appropriate network negotiated rates. Non

network providers and non- negotiated services will be paid at the lesser of the MDR rate

at the percentile chosen by the PEBP plan or the billed amount. Dental claims will be

paid at the lesser of the MDR rate at the percentile chosen by the PEBP plan or the billed

amount.

The HealthSCOPE system will pay the lower of charges or scheduled amount when

contracts allow.

The HealthSCOPE system utilizes modifiers to determine R&C for professional and

technical components for diagnostic, laboratory and radiological procedures.

Assistant surgical charges, when performed by MDs will be systematically calculated by

the HealthSCOPE system at 15% or 20% (appropriate rate) of the R&C amount (or the

network fee schedule) allowable for the surgeon’s procedure performed.

HealthSCOPE will pay all related charges of an inpatient stay at the network level if a

network hospital is utilized if the benefit plan dictates. This will be performed on a

manual basis by HealthSCOPE.

HealthSCOPE is utilizing a form of R&C for Non-PPO Durable Medical Equipment

(DME) claims when applicable.

In situations where the PEBP member has claims adjudicated under the PEBP Preferred

Provider Organization (PPO) Exception Rule (50 mile rule), HealthSCOPE will identify

these exceptions at the time of adjudication and pay within the Exception Rule per the

PEBP Master Plan Document.


Membership Procedures

HealthSCOPE has the capabilities of electronic enrollment and re-enrollments.

HealthSCOPE will add or cancel employee information onto their system within twenty

four (24) hours.

Per HealthSCOPE, claims received for newborns can be paid and history tracked under

their own name.

The HealthSCOPE system analysts have inquiry capability to view eligibility files only.

They do not have the capability to make changes to eligibility information.

If an employee is terminated, the HealthSCOPE system will deny claims as not covered.

An explanation of benefits is generated every time a claim is received after this date.

HealthSCOPE will check for claims paid after this termination date.

Current historical eligibility information is stored on the HealthSCOPE system

indefinitely.

COBRA Administration

COBRA administration is being done by PEBP. If elected, determination for benefits

elected by individuals under COBRA administration rules can be done by HealthSCOPE.

The HealthSCOPE system can maintain an eligibility date that coincides with the

premium “paid to” COBRA date. If the system detects an exception to the date, it forces

human intervention. If the member is found to be terminated from COBRA, the claim is

denied. The HealthSCOPE COBRA system is integrated with the claims administration

system.

Provider Credentialing

Currently, providers are monitored by the PPO for credentialing. Claims received by

providers not in the PPO network are verified as legitimate by HealthSCOPE.

HealthSCOPE will check legitimacy of the provider through the internet and alternate

resources before payments are released.


Coordination of Benefits

Coordination of Benefits (COB) information is obtained via enrollment applications and

claims displaying positive COB by HealthSCOPE.

HealthSCOPE states that all claims are investigated for COB information.

HealthSCOPE’s procedure for COB is to pursue then pay for all possible COB claims.

Claims are denied until requested information is received. If a claim form displays that a

spouse is employed, HealthSCOPE will send a COB questionnaire.

The HealthSCOPE system utilizes COB indicators, which will cause a warning edit to

alert the processor to the presence of other insurance.

The HealthSCOPE system utilizes separate COB indicators for different lines of business,

i.e. medical, dental, etc.

The HealthSCOPE system has electronic split indicators to assure the proper payment of

claims received out of sequence and multiple positive COB periods.

Per HealthSCOPE, COB processing is performed by all claim processors.

The HealthSCOPE system can process claims utilizing a COB Credit Reserve program

on a calendar year basis if required.

HealthSCOPE will utilize the primary carrier’s discount when the discount is greater than

the client’s if by Plan design.

HealthSCOPE policies are to recover overpayments of past paid claims when COB is

discovered after the fact.

Medicare

The HealthSCOPE system will alert the Processor when a member or dependent may be

eligible for Medicare benefits. If an individual is age sixty-five (65) or older and

Medicare may exist, active employment may be verified.

HealthSCOPE can present a report specific to active participants for verification to

eligibility files when requested.

Controlling Possible Fraudulent Claims and Security Access

HealthSCOPE claims analysts have a payment authority of $10,000.00. HealthSCOPE

Team Lead has an authority of $35,000.00 and the HealthSCOPE Claims Manager has an

authority of $75,000.00. HealthSCOPE directors review claim payments in excess of

$75,000.00.


Security logs are created and monitored by HealthSCOPE. HealthSCOPE system utilizes

passwords, is monitored to restrict the use of certain system operations and can lockout

unauthorized users.

The HealthSCOPE system can track activity by individuals to identify who handled a

claim.

HealthSCOPE does currently offer website access to be used by clients for eligibility

purposes.

Quality Control and Internal Audit

HealthSCOPE has a total of 125+ claim analysts in their Little Rock location.

HealthSCOPE has 12 claims analysts dedicated to the PEBP account.

HealthSCOPE Claims Managers and Directors were found to be knowledgeable and

possess extensive training. Discussions and tests of their working knowledge of

adjudication processes and policies and procedures were positive. They were found to

possess the ability to identify and defeat many adjudication potential “problem areas”

defined with billing practices within the nation.

HealthSCOPE does not have internal audit personnel. They utilize an outside vendor that

conducts a review of no less than 2% of their claims.

HealthSCOPE has formal training programs, where policies and procedures are taught.

HealthSCOPE stated their training lasts four (4) weeks from the start. HealthSCOPE

offers consistent ongoing training and identifies needs of specific individual training. Any

needs are identified and supplied on an ongoing basis.

HealthSCOPE conducts audits on all processors. HealthSCOPE audits new analysts at

100% during their probationary period.

HealthSCOPE stated that experienced claim analysts will have the PEBP

performance guarantee levels met for claims per person per month audited.

Records for all analysts are kept on a database for performance reference by

HealthSCOPE.

HealthSCOPE has internal accuracy and production standards. HealthSCOPE’s internal

financial accuracy standard is 99.2% of paid claims and payment accuracy is 98%.

The production standard for HealthSCOPE experienced claims analysts is 150 - 175

medical/dental claims per day.


Internet Capabilities

HealthSCOPE does have internet capabilities to further extend membership and

administrative service levels.

HealthSCOPE has internet sites provided for member information. These sites provide

claim information, network provider identification and contact data.

HealthSCOPE internet sites were user friendly and easy to access. HealthSCOPE’s site

was checked for security processes of data protection and was found to be protected by

member supplied passwords, etc.

HealthSCOPE has an internet site available for vendor information. These sites provide

claim and benefit information, network rates and contact data.

Communication between Utilization Review (UR) and Claims Department

HealthSCOPE can currently accept communication between the UR and the claims

department via electronic source. Information received regarding pre-certification, PCP

references and Case Management can be entered on the system when received.

Precertification penalties for non-compliance will be manually applied by HealthSCOPE.

HealthSCOPE will apply the proper cutbacks to UR authorized number of service days if

different than the number of billing days on a manual basis. HealthSCOPE verified that

they will apply authorized number of service days according to PEBP’s methodology.

HealthSCOPE analysts are trained to identify potential catastrophic cases and refer them

to a Case Management program.

The HealthSCOPE system has the ability to communicate special instructions or

negotiate arrangements/ discounts to the analysts through the notes.

PEBP’s policy allows for a three (3) Level Appeal process. HealthSCOPE stated that they

can apply this policy.

Claim Repricing Capabilities

HealthSCOPE is currently receiving network fee schedules and provider maintenance

data electronically for internal claims repricing. HealthSCOPE has data loaded into their

adjudication system within 24 hours of receiving.

HealthSCOPE currently is participating with multiple networks for repricing via the

Electronic Data Interface (EDI) methodology.


Banking and Cash Flow

HealthSCOPE stated that they can accommodate PEBP’s requirement for payment

release frequency. HealthSCOPE stated that they could release payment checks the same

date of final adjudication if before 10:00 AM.

HealthSCOPE is utilizing bulk checks for provider payments.

Reporting Capabilities

In addition to the standard AD HOC reporting, HealthSCOPE has the capability to

develop and produce client-requested reports based on any information captured on the

system.

HealthSCOPE stated that no additional charge would be applied for any requested report

which is in the standard reporting.

General System

HealthSCOPE has been using the current system for twenty plus (20+) years. The current

system has undergone many updates since its inception.

HealthSCOPE has the controls in place for the application of source coding enabling

them to make client specific adjustments as necessary.

HealthSCOPE has written procedures in place for a formal Disaster Recovery program.

HealthSCOPE conducts daily system data backups, which are stored in a secure location

off site.

HealthSCOPE stated that they have not experienced any significant downtime.

Security

This audit reviewed building security, the handling and security of sensitive documents

and materials and the proper disposal of data for any potential data breaches. The audit

also reviewed internal processes and potential exposure to possible fraudulent activity.

The HealthSCOPE office located in Little Rock, Arkansas was found to be secure. All

external ingress and egress locations were secured and locked. Entrance was made

available to HealthSCOPE personnel by electronic pass keys. HCA entry beyond the

reception area required assistance from official personnel. The facility work areas are

monitored and recorded twenty four hours per day.

Sensitive data, specifically, member Personnel Health Information (PHI) of

HealthSCOPE’s clients was reviewed for security exposure practices. Any paper was

found to be in secured areas and/or file cabinets when not in use.

A review of the system server equipment for HealthSCOPE noted it was secured in a

separate area under locked environments with appropriate fire suppression protections.

Every attempt to access the adjudication system required appropriate security measures

such as passcodes, etc.


HCA CLAIM AUDIT PROCEDURES

HCA selects a random sampling of claims from the client's current detailed claims

listings. The third party administrator is advised of the audit and requested to provide

either limited system access or paper reproduction of the entire file associated with each

random claim.

Each random claim and file is reviewed comparing eligibility and benefits to information

provided by the client. Third party administrator personnel are questioned regarding any

discrepancies. Entire files are reviewed to assure the client that deductibles, out-of-

pockets benefit maximums and related claims are processed correctly. This allows HCA

to verify all details of the client's benefit plan.

Audit statistics involve only those claims chosen in the random selection. If a randomly

selected claim HealthSCOPE been recalculated or corrected prior to our audit, an error

was not charged for the original miscalculation. HCA will, at its opinion, comment on

any claim in the random claim history to illustrate situations it feels the client should be

aware of or specific areas requiring definition.

A payment error is charged when an error identified in claim processing results in an

under/ overpayment or a check being paid to the wrong party. Assignment errors are

considered payment errors since the plan could be liable for payment to the correct party.

In situations where there is disagreement between HCA and the third party administrator

as to what constitutes an error, both sides are presented in the report. Final determination

of error rests with the client.


AUDIT RESULTS Listed below are the errors or issues of discussion found by this audit while processing

the claims for PEBP.

Ref. No. 004 Medical HSB claim no.

NOT charged in statistical calculation. Note to client for information only.

36223.50.51 chg 1654.00 allow 744.30 Multiple Surgical Guidelines applied

36226 502.00 270.60 Multiple Surgical Guidelines applied

76377.26 146.00 57.90

76937.26 62.00 12.99

Please supply the fee schedule rate for 36223 & 36226 without any

modifiers. SHO schedule SFS.100 but could not find the specific

services.

HSB response: Please see attached for rates.

HCA Note: 36223 contract rate w/o modifiers is $1332.59 and 36226

contract rate is $1475.41. Contract is lesser of 60% or 100% of SFS fee.

Claim should have been paid as:

36223.50.51 chg 1654.00 x 60% = 992.40

36226 902.00 x 60% = 544.20 x 50% = 270.60

76377.26 146.00 x RT = 57.90

76937.26 62.00 x RT = 12.99

TOTAL $1333.89

HSB Applied MSG to both services versus 60% off billed charges of

36223.50.51.


Overpayment - $930.00

Audited claim CRNA - 00740 QX chg/allow/pd 1860.00 (non-PPO)

Claim xxxxxx also paid 1/26/16 for same DOS for anesthesiologist -

00740 QK, P1 chg/allow/pd 1860.00 (non-PPO)

Why did both CRNA & anesthesiologist get the full amount?

Shouldn't allowable have been split between the two claims?

HSB response: Agree. Modifier overlooked on supervision claim in error.



These labs were paid on 1/25/16 chg 240.10 allow 54.40

Claim adjusted on 4/5/16 to pay additional $0.05. Why the adjustment?

HSB response: New fee schedule received 1/21/16. QA reports created for

changes and claims adjusted.




Originally paid on 1/20/16 w/ $60.00 allowed

Adjusted on 2/18/16 w/$75.00 allowable due to SHO pricing correction

System reflects numerous adjustments caused by SHO pricing corrections.

Were there unusually high number of retro contract rate adjustments for

SHO in 2016?





Claim orig pd as non-PPO on 9/11/15 (220.54 to ded)

Claim adj'd on 1/20/16 due to 50 mi radius rule. Pd $220.54

HSB response: No error. Claim processed OON. Patient lives in Caliente

not Dayton as shown on address of member. Claim reprocessed in net per

50 mile rule. No PT providers in Caliente on PEBP website.



Audited claim is original

Claim xxxxxx adjustment for SHO fees on 4/5/16 claim paying 385.82

Overpayment now exists

When were updated SHO fees received?





Claim for 88305, 88333, 88341, 88342

Claims xxxxxx & xxxxxx same DOS, same provider also for lab services

were denied as N/C under SHO contract.

Should audited claim have also been denied?

HSB response: No. Audited claim is correct. Bias claim xxxxxx is correct.

Bias claim xxxxxx - 88 codes should have been priced. Claim will be

adjusted.



Claim originally paid on 2/5/16 at 51.97

Claim adjusted on 3/31/16 per SHO pricing correction




Ref. No. 225 Outpatient Hospital HSB claim no.


System reflects original claim had wrong PPO discount fee. Was this

because it was attempted w/SHO fees or something else?

HSB response: Analyst initially referred to SHO pricing in error. Processed

w/HTH pricing. original trans was reversed and not processed. Audited

claim is correct. No error.



Member is Retiree w/Medicare B only

Claim not COB'd with Medicare. Shouldn't it have been?

Paid w/HTH repricing

HSB response: Yes. Claim should have been coordinated with Medicare.



77056 chg 165.00 a/pd 80.45

99215 100.00 32.42

Claim being paid at 100% - ded/OOP not met. Claim has medical DX's.

Why was claim paid at 100% versus going to deductible?

HSB response: Office visit s/b split from mammogram. Mammogram is

1st plan year benefit.


Underpayment - $1,960.09

Originally paid claim under xxxxxx on 12/14/15. Audited claim paid on

2/24/16.

38571.51.80 chg 1118.75 allow 212.56

55866.80.51 2320.00 440.80

3438.75 653.36 x 100% = $653.36 pd

EOB on this claim states asst surg fees are payable at 20% of the allowable

amt of the surgeon's fee.

Claim xxxxxx is surgeon's bill paid on 12/14/15

38571.51 chg 4475.00 allow 4251.25

55866 9280.00 8816.00

13,755.00 13,067.25 x 100% = $13,067.25 pd

Per contract = no reduction applied

Since both asst & surgeon's bills utilized the same fee schedule shouldn't

asst surgeon's bill be 2613.45 versus 653.36?

38571.51.80 4251.25 x 20% = 850.25

55866.80.51 8816.00 x 20% = 1763.20

HSB response: Yes. Agree claim will be adjusted.


Ref. No. 334B Medical HSB claim no.


Claim xxxxxx CPT 00865 QK chg 1696.00 a/pd 1611.20

Claim xxxxxx 00865 QX 1568.00 1489.60

Why did CRNA & anesthesiologist both receive full allowable amounts?

Shouldn't fees have been split between the two?

HSB response: Provider bills w/cuts already taken for these services. We

only take 5% discount. No error.

HCA note: HCA would require additional documentation as each of the claims

appear to be for full charges for the anesthesia service.



This patient had 3 tests on 1/29/16.

Claim xxxxxx is facility bill for all 3 tests all paid at 100%

Claim xxxxxx is for 2 of the test readings - both paid at 100%

Audited claim is for 1 of the test reading 76642.60 allow 42.34

All three tests had same DX. Shouldn't all billings be applied w/same

benefit? Should audited claim be paid at 100% versus 80%?

HSB response: No - ultrasound s/b at 80%. Audited claim is processed

correctly. All charges are for ultrasound.



Services are for routine benefit.

Original claim xxxxxx applied 171.82 to ded on 11/30/15

Audited claim adjusted to routine benefit on 2/26/16

HSB response: Claim initially processed as illness. Post QA file reviewed

& reprocessed as wellness due to DX in history. No error.



REV 510 chg 246.00

Medicaid paid $44.00 on this claim

Our adjudication reflects $246.00 applied to deductible. Shouldn't we have

applied our discount before applying to deductible?

HSB response: Medicaid reclamation claims are considered out of network.

No benefit to payout. All went to deductible. No error.




Claim paid as: 30520 chg 5838.70 a/pd 598.91

30140 LT 5838.70 598.91

30140 RT 5838.70 598.91

1796.72

Shouldn't claim have paid as:

30520 allow 898.36 pd 898.36

30140 LT, RT 898.36 x 150% = 1347.54 x 50% = 673.77

1572.13

Claim overpaid 224.59

HSB response: Agree. Bilateral reduction not applied. Claim will be

corrected.



D7880 - occlusal orthotic device, by report

D7880 chg 1500.00 allow 1500.00 pd 1200.00 (in netwrk at 80%)

Since provider is non-PPO and has no Diversified Dental rate shouldn't

UCR have been applied? UCR = $909.85

HSB response: Yes dental UCR should have been applied.



PT received services for both 45380 & 43239.51 from this provider

45380 was paid as routine & 43239.51 paid as a medical benefit

Audited claim (billed from same provider) is anesthesia for both services.

Shouldn't the anesthesia for the 45380 have been paid at 100% versus 80%?

HSB response: Audit claim is correct. Diagnostic colonoscopy. Txxxxxx

is incorrect and will be reconsidered.



88305.TC chg 179.30 a 36.12 pd 28.90 on 2/25/16

Audited claim adjusted to pay additional 3.51 on 3/31/16

System reflects SHOSOUTHWEST was entered late. Appears SHO

contracts that are associated w/Medicare rates were updated late?






Original claim allowed 36.12 on 2/26/16 - applied to ded

Audited claim allowed 40.51 on 3/31/16 - applied to ded

Appears to be adjusted for SHO contract w/Medicare %?



Ref. No. 514 Inpatient Hospital HSB claim no.


Claim originally paid at $6,639.68 on 1/14/16 per HTH pricing

Claim adjusted on 3/14/16 per HTH corrected repricing and new allowed

of $119,864.68

HSB response: Appears we have a display issue and will be opening ticket

with our system vendor for review. We will advise auditors to watch this

until we have a resolution.



January 1, 2016 – March 31, 2016.


5.2. HealthSCOPE Benefits response to audit

report. (Mary Catherine Person, HSB)

Little Rock / Columbus / El Paso / Indianapolis / Los Angeles / Nashville / St. Louis www.healthscopebenefits.com

May 4, 2016 Public Employees’ Benefits Program Board State of Nevada 901 Stewart Street, Suite 1001 Carson City, NV 89701 Subject: Audit Results January 1, 2016 – March 31, 2016 Dear Public Employees’ Benefits Program (PEBP) Board: HealthSCOPE Benefits appreciates the opportunity to respond to the audit performed by Health Claim Auditors for the third quarter of Plan Year 2016. The audit included 500 claims with paid amounts totaling $249,299.85. HealthSCOPE Benefits is very disappointed to have missed the financial accuracy percentage by less than ½% for this audit period. We continue to review quality improvement opportunities within our organization, as well as with our external vendors. We take the audit process and our service to PEBP very seriously, and we are constantly reviewing ways to enhance our performance. Based on our review, we have implemented the following quality control measures: Item (1) HealthSCOPE Benefits will make additional programming enhancements for multiple surgery claims, including assistant surgeon claims. We are also adding additional levels of reviews of these claims prior to release. We continue to provide customized training for the analysts on complex claims such as multiple surgeries, and we are evaluating additional training methodologies.. Item (2)

HealthSCOPE Benefits will inquire about system modifications to automate the application of rate reductions for anesthesia services when CRNA and anesthesiologists

27 Corporate Hill Little Rock, AR 72205

Little Rock / Columbus / El Paso / Indianapolis / Los Angeles / Nashville / St. Louis www.healthscopebenefits.com

bill the same session. In addition, we will conduct additional training on anesthesia modifiers.

We continue to be pleased with the financial savings we are able to provide on the PEBP account. We saved PEBP an additional $1,045,765 through non-network negotiations, subrogation and transplant savings in the third quarter of Plan Year 2016. We appreciate the quarterly audit process and the interaction between Health Claims Auditors, PEBP, and HealthSCOPE Benefits as it provides for continuous improvement in our service. Thank you for the opportunity to respond to this report. Sincerely,

Mary Catherine Person President



January 1, 2016 – March 31, 2016.


5.3. Accept audit report findings and assess

penalties, if applicable, in accordance with the

performance guarantees included in the

contract pursuant to the recommendation of

Health Claim Auditors.

Documents

5....March 2016 and were processed by HealthSCOPE from 01 January 2016 through 31 March 2016 (PEBP’s Third Quarter Plan Year 2016). These claims were stratified by dollar volume